Day Trading And Pay-Per-Click

Recently, I was at the BIAKelsey conference in the ever-colorful and precarious city of New Orleans. I bring this fact up because I learned of an analogy that will forever change my views regarding Search Engine Marketing. There we were, in a meeting with a prospective client on the top floor of the Hyatt Regency with a beautiful view of the SuperDome.

In our discussions, the client asked some of the same questions we as pay-per-click’s hear on an everyday basis. The way my colleague and CEO Scott Cohen answered these questions, was something new to me entirely. He masterfully used the analogy of a day trader.

“Think about PPC management as you would envision a Day Trader managing a current portfolio using a self-serve platform like ScottTrade. The day trader weaves trades in and out; sometimes hundreds of times a day. Managed PPC services is very much the same. Our account analysts spend a substantial amount of time reviewing, changing, testing, researching, and executing daily trades on our client’s behalf. We trade a commodity that can produce, in some cases, a staggering ROI. That commodity is targeted clicks and relevant traffic. Now, if you leave your portfolio on autopilot after an acquisition, chances are Goldman Sachs is going to take you to the cleaners all month.”

I’ve taken Scott’s analogy one step further in outlining specific trading principles and related them to our space. I am, in no way, a day trader or stock broker. I am, however, a well-rounded Pay Per Click professional, that has always found value in comparing, contrasting, and finding parallels that can help me perform at a higher level on behalf of my clients.

Let It Run

The first step, in my opinion, is letting your ideas and optimizations run until you have reached statistical significance which suggests a necessary change. If a broker or day trader was in an account every day and made changes to every asset without letting the market run its course it would be very difficult to determine a winning portfolio from a losing portfolio. Day traders, for example, will often follow the principal of not trading during the first 15 minutes of the open market bell. They want to envision their trades and adjust to the markets fluctuation and maturity. Of course, there should always be a healthy balance in regards to the amount of changes made in an account. I recommend using a metric or KPI approach to determine the roadmap of an account. Obviously, putting all of your eggs in one basket can pay off big, but will usually include great risk, perfectly segueing into our next principal.

Diversification

One of the most common account types we come across contains one campaign and forty ad groups. As soon as we get into the account, we see that every ad group follows the settings of the one campaign it is tied to, meaning in theory, all of their eggs are in one basket. We have found the best results involve creating a new campaign and further breaking out the campaign or diversifying the account. In reality, this strategy makes life much easier. We can quickly spot winning and losing campaigns and take the appropriate action because we now have readily available statistical significance. Here is a fantastic article on account organization that I have found helpful in training new employees on the “golden rules” for campaign and account organization.

Be Willing To Lose Before You Can Win

Although many SEM analysts can handle and determine winners, controlling losing campaigns, groups, ads, or keywords, can be difficult at times. Some rookies panic at the first sign of loss and end up making a series of impulsive changes that cost them in the short and long term. As a pro, you must be willing to accept some losses. The key is to decide in advance what you’ll do whenyou’re confronted with losses.

Although any CEO or Marketing Director can learn PPC, few have the discipline to deliver consistent quantifiable results. What trips up many people are their emotions, which is why it’s so important to create a set of flexible rules and reminders. Your goal: follow the rules you have developed to help keep you on the right side of any account. In our 180university PPC courses, we call these rules “the 10 commandments of PPC.”

Cut Your Losses

Managing losing campaigns, ad groups, ads, and keywords is paramount to not only surviving as an SEM analyst, but thriving. Although you also want to let your winners run, you can’t afford to let them run for too long if they begin to show a negative trend. PAC or (pause, analyze, create) is an acronym we in the industry should strive to work by. It’s more art than science to get it right, but learning how to control losses and execute on winners is essential if you want to take your talents to the enterprise level.

Never Act On Tips From An Uninformed Source (Clients)

Don’t get me wrong, your respective client probably understands their industry/products/services better then you do. That said, there is a reason YOU are managing their pay-per-click. In many cases, they have tried and failed and have learned from their mistakes by hiring a professional. I will often cite this quote when educating a prospective client by Red Adair, “If you think it’s expensive to hire a professional to the job, wait until you hire an amateur.”

If one of your clients frequently calls you to complain about results, often times they just need someone to vent to and in some cases will give you bad advice because they are in a bad position. Remember, you are the Pro.

Journaling

Any successful financial analyst will record all of their winning and losing trades. Documenting what you have done right and wrong will increase your efficiency as a domain expert and industry leader. Although taking notes can be tedious, I know it helped me when I first got started, and continues to ensure a positive cause and effect. Truthfully, I learned more by making mistakes then I have by winning. It wasn’t always pleasant when six o’clock rolled around and I was still taking notes on my workday, but I can promise it has made all the difference.

Exit And Escape

As I researched more about day trading and the stock market, I learned something new from almost every article I read, or every person I spoke with. The one thing they seemed to always have in common was an exit strategy. This note comes back to #3 in my list: create a set of flexible rules and reminders.

Believe it or not, not everything works forever. SEM is a mercurial industry, and it’s crucial to re-evaluate your strategy from time to time. Comparing one campaign’s performance this year to the same campaign’s performance last year, (though sometimes can be helpful in taking over an account) is really not always the best practice in any discipline. The fact is, markets change and fluctuate based on many factors. A perfect example, would be Amazon leaving Google’s search network. Last year, you may have been directly competing with the eCommerce giant with massive pockets. In the coming months you may have one less competitor in the SERPS.

Final Thoughts

In conclusion, almost no one is born a PPC master. Except maybe (Avinash Kaushik). But with steady practice and hard work, you can count on a positive impact. Cause always shapes effect. The strategy I’ve devised was born from years of study, research and implementing over time on both successful and unsuccessful PPC campaigns. My mentors are the leaders in the space and have graciously imparted best practices that consistently produce strong ROI. Following these well researched techniques from the stock market will help you serve your clients and help them triumph in the online game.

Can you draw some parallels that I missed? Feel free to add in the comments below, I would love your feedback and engagement.

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